Starting a family is one of the most exciting steps for many couples. With the added responsibility of caring for a child also comes additional financial obligations and pressures. Planning ahead if possible can help reduce any potential stress about money and allow you to focus on the joys of being a parent.
Preparing For Your Expanding Family Financially
Money Moves To Make When Starting A Family
- Pre-baby spending budget is one of the most important steps to take, especially when you find out you are expecting. The euphoria of parenthood can lead to uncontrolled spending on baby “things” even before they arrive.
- Building multiple savings funds that include an emergency fund, income replacement fund during any leave, and an ongoing fund for future purchases for your new child.
- Post baby budgets are extremely important and should include multiple income scenarios based on different levels of employment for one of the spouses after birth. Other factors include accurate new expenses including daycare if both parents continue working.
- Updating the estate plan which includes the following basics: creating or updating your will, naming a guardian for your child, and updating all beneficiaries. Also consider additional life insurance would be wise.
- Improving your spending habits by doing more comparison shopping, using coupons, and looking for discounts is extremely important when children arrive. Your expenses might go up faster than your income so controlling spending is important for long term financial success.
- Evaluate your living space and determine how long you can continue to live in your current situation. Whether you are renting or own a home, you might need to move soon after the baby arrives so you need to consider this in your financial planning.